Money Supermarket

pericom · 11-09-03

Anyone ever been approached by them?

Do they pay on time and are they reliable ?

Luca Brasi · 11-09-03

I've been doing some work with them

They are excellent at paying on time - just a few days after receiving the invoice.

Overall it works and converts pretty well and they get some good offers.

However, I tend to run it as more of a back up to affiliate content rather than instead of, as the reporting is pretty basic and your left wondering how much you've made for a month or so.

The contact is very friendly and helpful but, as affiliates are not their main business they dont respond to requests for links etc very promptly.

Pericom - PM me if you want more details contact info etc.

Matthew Wood · 11-09-03

Just sorting their invoice out now, one apparent downside with these guys is that they claimed last time that VAT has already been added to the commission total, therefore it appears that you are effectively taking a deduction of 17.5% if you are VAT registered.

Unless of course I'm getting it wrong, but last time I had to resend my invoice! - anyone else had experience with that?

Other than that agree that payment is on time, and its quick once invoiced, agree though that they should be far more proactive towards affiliates, as the potential is huge for them.

Matt.

Supercod · 11-09-03

Big publishing company (can't mention who or they will write some unfair articles about my services) have done that trick a few times, they used to say the VAT was already added to my commission.. Strange that as before I became VAT registered it was the same commission amount, soon as I had a VAT number it was commission minus the VAT.. I am sure the VAT man will have a fun time looking over the books of any company that is not paying VAT when they should.. I hear prison is not as bad these days as long as you don't like to shower

I am not saying that these guys are doing this, just to make that clear however if they are legal and above board then you can ask for a financial break down and if they are a PLC company you can tell them you wish to write to the financial auditors (they have a real name but I forget it right now) to make sure everything getting done correct (that got my issue solved without having to write any letters).

drivetowin · 11-09-03

Any Finance Broker will try not to pay VAT to their suppliers - the reason is that due to a glitch in the VAT regulations, they are not able to reclaim the VAT they pay to their suppliers (it's something to do with the fact that they don't charge VAT for their services) - not sure of the exact details - just know that a few years ago we developed a tracking system for loan applications for large finance brokers and ended up setting up a company in Jersey so we could invoice them all without charging VAT - it increased our business by about 500%

Ross · 12-09-03

You're dead right Kbudden. Insurance is exempt from VAT and insurance companies and brokers are not allowed to register for VAT. This means that they can't claim back any VAT that they have to pay, making them very loathe to pay you 17.5% more than they want to.

Matthew Wood · 12-09-03

Thanks Ross for clearing that up, its nice to know the full situation

- hope you are well BTW.

Matt.

getvisible · 12-09-03

[quote]Any Finance Broker will try not to pay VAT to their suppliers - the reason is that due to a glitch in the VAT regulations, they are not able to reclaim the VAT they pay to their suppliers (it's something to do with the fact that they don't charge VAT for their services)QUOTE]

Had that with Quoteline Direct - they insisted that they didn't pay VAT because they were'nt registered. Took emails all day to explain them that as I CHARGE VAT they have PAY it.

Nope they didn't increase commissions to cover it but I make a point of sending them a VAT invoice (even if they don't want it) to prove a point!

Grr these broker!!!

wibble99 · 12-09-03

When they refuse to pay an additional 17.5% they are still paying VAT - they've just effectively reduced the commission they give you.

Most companies will pay you x and if you are VAT registered will add on the 17.5% as it costs them nothing to do that as they just claim it back.

But companies like this are unable to claim VAT back and so to pay you it on top of what they already pay you would mean that they have to lose an extra 17.5% off their bottom line. The other 'nice' companies that do pay VAT probably wouldn't give you it if they couldn't claim VAT back.

As for them not paying VAT - they are. You have to charge VAT and when they are paying you VAT is included. What they are not doing is paying you at the old rate and adding 17.5% on.

What they'll be saying is that they'll pay an affiliate x for a lead. If you're not VAT registered then that's all profit, if you are then 100/117.5 of it is profit and the rest is VAT.

If they owed you £1000, you billed them for £1000 + £175 VAT and they just paid £1000 then they're not avoiding paying the VAT. They'd agreed to pay you £1000 which, if you're VAT registered, includes the VAT. So only £851.06 is profit and the rest should be recorded as VAT. You can't, for instance, say to the VAT man that you're keeping all £1000 as they didn't pay the VAT bit.

While I can see it's annoying, especially if you didn't realise, I don't think they're doing anything wrong. They're willing to pay a certain amount for you to push their product. If your costs are higher due to being VAT registered then they're not willing to lose an additional 17.5% off their bottom line, which is reasonable as none of the other merchants would if they couldn't claim it back.

So don't get annoyed that they're doing dodgy things and not paying VAT when they should, as that's not the case. They're doing something perfectly understandable (and normal in the affiliate world at least - some gambling companies are the same) for a company that can't claim VAT back and the VAT is included in what they pay you.

You just have to decide whether to push their product based on a lower commission than you first thought.

kirsty · 13-09-03

aaah, this is all making sense now.

we've had problems in the past with some companies just not responding to queries about vat. now i come to think about it these have all been finance or betting type of companies.

what i've done is to plonk their payments in our accounts knocking their values down so that the total we receive from them looks like a smaller total with vat added on and we take the hit to pay the vatman his share and hopefuly keep us legal. i'm glad to hear other people are doing similar things as i've been unable to find out what the vatman actually wants us to do.

if anyone's ever got an answer about this kind of thing out of the vatman or the hmce.gov.uk website i'd be really interested in hearing about it.

thanks
kirsty

wibble99 · 13-09-03

Kirsty, it sounds like you've been managing it correctly. Payments you receive when VAT registered always include VAT. If the customer pays you less then you still have to split it up to give the VAT man the right percentage.

It would be nice if merchants made this clear, though.

If you have any VAT questions you can phone the VAT office who are happy to help as they want you to get it right. Or even submit a question to them via a form on their web site. I did that a while back with a question about becoming VAT registered and they replied a few days later with a very informative, full reply. So that could be worth doing if you have any questions.

Stolichnaya · 13-09-03

It really depends on how the loan broker sees the status of the affiliate. If the affiliate is being paid for'advertising', then the affiliate has every right to charge VAT. However, the loan company can, and usually will, choose to classify the affiliate as an introducer - i.e. the affiliate introduces clients to the broker's services, and receives a commission for doing so.

Commissions for introduced loans business are VAT exempt, so the affiliate will not have to pay VAT and the merchant will not need to charge it.